Study Examines Correlation Between Napster, Album Sales

As if the actions of the three major parties involved in the maligned Napster issue don't feed the public enough
ammunition, college students, artists, and the recording industry are being
egged on -- albeit, inadvertently, by outside sources.

Last week, Reciprocal published the
findings of a study by SoundScan unit VNU Entertainment Marketing
Solutions. The survey was part of an effort to determine whether online file sharing was the cause of a two-year decline of college market album sales.

Though VNU acknowledged that overall retail sales increased between January
1997 and March 2000, album sales in more than 9,000 SoundScan reporting
retail stores within a five-mile radius of more than 3,000 colleges declined by
4 percent over the last two years.

One could argue that the statistics, if correct, could be coincidental.
However, the study did find a correlation between Internet access and the way listeners acquired music.

"Many students have high-speed
connections to the Internet, and anecdotal evidence suggested a link between
students with fast connections, the illegal trading of unlicensed music, and
its effect on record sales."

Not surprisingly, the study even provoked a response from Hank Barry, Napster's new
interim chief executive officer.

"The problem with the study is that big-box retailers and online retailers
are not within the area studied," he said in a statement. "This has to do
with consumer choice to shop at large retail stores and online. It has
nothing to do with Napster."

Eventually, Reciprocal Music's president goes on record in the study:

"It is now clear that the controversial practices of companies that provide
directories and an easy interface to libraries of unlicensed music are in
fact detrimental to the growth of the music business and those artists whom
they claim to support," claimed Larry Miller, president, Reciprocal Music.

But, is it really "clear?" And will Napster face a nasty backlash from all
of the negative press, the legal brouhahas and Lars Ulrich's "kill-em-all"
attitude toward Napster members who pilfer Metallica's music?

No, say industry analysts.

Aram Sinnreich, analyst for Jupiter Communications, said Napster's current
position points to an ages-old credo.

Perhaps not, but they certainly helped themselves out by sponsoring a $1.8
million tour for Limp Bizkit. And while Sinnreich said he does not approve
of pirating, he said artists could take some positives from the exposure
they are receiving from Napster, MP3.com
and others of that ilk.

Sinnreich does not believe that artists' sales will be severely tested by
the online music exchanges offered by Napster, MP3.com, Gnutella and
Scour.net.

"If Napster and MP3.com have a hundred thousand users, they have a whole
community of users who are fans of all kind of artists," Sinnreich
continued. "We're talking about a whole community online where fans can tell
their friends about a specific band that they like. It has the potential of
helping a band go gold or platinum."

But, surely Napster can't be that popular? Are you kidding? Fans can
cruise to the band Offspring's Web
site to choose from an array of Napster merchandise -- all proudly
displayed on the home page. The band isn't even offering its own selection
of T-shirts and hats on its home page. It's almost as if Napster, cute logo
and all, is being treated like some taboo cult artist rather than a
business.

Furthermore, Offspring took its championing of online music exchanges
further. It posted a message supporting MP3 technology: